Musk’s xAI doubles funding, reaches $12 billion

Concerns rise as xAI integrates AI models across Musk’s ventures, raising shareholder objections.
X’s AI training practices spark regulatory scrutiny in the EU, as questions emerge about using publicly available user data without clear consent.

Elon Musk’s AI company, xAI, has raised $6 billion in its latest funding round, doubling its total to $12 billion this year. The investment attracted high-profile backers such as Andreessen Horowitz, BlackRock, and Fidelity, with participation limited to existing investors. Reports suggest the company is now targeting a $50 billion valuation.

Founded last year, xAI released its flagship generative AI model, Grok, which powers features on X, formerly known as Twitter. Grok, known for its bold and unconventional responses, has integrated capabilities like image generation and news summarisation. The company has also launched APIs and a standalone app, aiming to compete with AI giants like OpenAI and Anthropic.

The company’s Memphis data centre, housing 100,000 Nvidia GPUs, is central to training the next generation of AI models. Plans are underway to double GPU capacity and secure additional power to support operations. However, these efforts have faced criticism over potential environmental impacts.

xAI envisions integrating its AI models with Musk’s other ventures, such as Tesla and SpaceX, sparking concerns among Tesla shareholders. Despite these challenges, xAI’s rapid growth positions it as a formidable contender in the expanding AI industry.